Elucidation of the mechanism of action of the HCV NS5B polymerase thumb site II inhibitors has presented a challenge. Current opinion holds that these allosteric inhibitors stabilize the closed, inactive enzyme conformation, but how this inhibition is accomplished mechanistically is not well understood. Here, using a panel of NS5B proteins with mutations in key regulatory motifs of NS5B--the C-terminal tail and β-loop--in conjunction with a diverse set of NS5B allosteric inhibitors, we show that thumb site II inhibitors possess a distinct mechanism of action. A combination of enzyme activity studies and direct binding assays reveals that these inhibitors require both regulatory elements to maintain the polymerase inhibitory activity. Removal of either element has little impact on the binding affinity of thumb site II inhibitors, but significantly reduces their potency. NS5B in complex with a thumb site II inhibitor displays a characteristic melting profile that suggests stabilization not only of the thumb domain but also the whole polymerase. Successive truncations of the C-terminal tail and/or removal of the β-loop lead to progressive destabilization of the protein. Furthermore, the thermal unfolding transitions characteristic for thumb site II inhibitor-NS5B complex are absent in the inhibitor-bound constructs in which interactions between C-terminal tail and β-loop are abolished, pointing to the pivotal role of both regulatory elements in communication between domains. Taken together, a comprehensive picture of inhibition by compounds binding to thumb site II emerges: inhibitor binding provides stabilization of the entire polymerase in an inactive, closed conformation, propagated via coupled interactions between the C-terminal tail and β-loop.